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04/14/2023 copyright River Heights Consulting 2011
Process Interaction
Process in Distribution
SalesCRM, Pricing,
Targeting, Metrics
PurchasingSPA, Ship & Debits, Vendor
Management
AccountingAccounts Payable, Accounts Receivable,
Inventory Valuation, Cash Flow, Payroll, etc.
Difficulty Systemizing
LogisticsWarehousing
Freight Shipping
IT/Support
The Wild west
The Distributor Sales ProcessIt’s Complicated and…
It’s Interactive
Customer Interaction
Pricing
Vendors
There’s Pushback
They can’t make me do that..This steals from my selling time…
Big Brother, Mind PoliceJob SecurityI’ll fight….
Do you want me Selling of Filling out Forms?My sales will go down because I will loose
customer intimacy!
We already have a process….
Documented?
Written down or flowcharted?Provided to Salespeople and others?
Metrics?
Are there measures of success?Are these real or subjective?
Managed against?
Are people judged based on their adherence to?Is coaching provided to help follow process?
Real or imagined?Here are the tests of a real process..
But, it’s informal…Each salesperson has their own…
Evidence MountsBusiness Partner
Contributor
Solutions
Preferred Supplier
Approved Vendor
No Process Informal Defined Defined Continuous
Perceived Value
Sales Process
Only High Process Groups
Pricing ProcessInteracts with Sales
Forces Process Driven:• Feedback • Scientific Pricing Analysis• Training• Documentation
Customer Activity
Pricing
Vendors
This Results in:• Better Segmentation
(Customer and Vendor)• Stronger Feedback• Discipline in Sales Mgmt.
Upper QuartilePerformance
• Often have higher margins but…
Not a margin driven thing…Better Control of ProcessAffects:• Selling Activity/Results• Operational Costs• Transactional Costs• Inventory Control• React Better/Faster to Changes in Economic Conditions
What’s next?
Customer Interaction
Pricing
Vendors
Customers most likely to value and respond to our solutions
Best customer to product
match
TARGETING
Product Level TargetingDocumented?
Product Selection* Based on Vendor* Management DirectionLimited number of accounts selected* Type of AccountShort term
Metrics?
Order Received* Predetermined size* First/Trial OderSpecification* OEM impactNumber of Targets
Managed against?
Right Customer* Are we matching customer and product well?Time to order* Are we achieving success in the right time?Number of Targets* Organization skills?
Vendor – OrientedFast Results – typically 6 months or lessEasily automated Pricing
Process
Solution Targeting
Information
Developing
Acceleration
Partnering
Are we there yet?plus
Lean
Information
Developing
Acceleration
PartneringStage Milestones Information We are learning the people and how this customer does business on the inside. Still asking questions, still finding out who does what. In many ways this is the most important stage – skip over this stage and all you get is practice writing proposals.
Who and what do we know? Contacts at the customer?
Purchasing, production, maintenance, engineering, executive level?
Who is likely to be the decision maker? Why? Is there a gatekeeper, roadblock or imposter?
Who is the incumbent supplier? Strengths, weaknesses, allies in the customer
What are their business plans for the future? How do they fit into the market place? Major issues around our kind of business?
How might we address those problems?
Do we see issues they do not see? What are those issues?
Developing We are aiming our proposals at the places where the customer feels the most pain. This maximizes our chances of making every proposal a winner.
Which problem should we attack first? What is the advantage to the customer?
Who at the customer is most likely to understand the value? Have we developed any metrics? How long will it take the customer to decide? What is our probability of success?
How will this position us for additional business?
Are there other opportunities that will fall should we succeed?
Accelerating Pushing our competitors out of the way. Looking to make certain this goes into full bloom and maximum profitability.
How will we handle the switchover? Do we have a set date, occurrence ect?
How is this defined? Do we have a signed agreement?
If no, why not?
Partnering Nothing is worse than losing a customer. What can we do to understand now – how to better retain this guy for the long haul.
How will we “lock in” to be competition proof? How are we going to measure customer satisfaction? How often should we “service the customer”?
Typical Documentation
Measures • Where are we in the process?• Time in stage• Salesperson stuck in stage?
Coaching/Management• Need to abort late in process?• Salesperson’s ability to gather
information.